Can a Policy of Higher Inflation Reduce Real Interests in the Long Run?

This paper describes a simple general equilibrium model in which a permanent easing of monetary policy, engineered via open market purchases, may produce a permanent decrease in the real interest rate and a permanent increase in the inflation rate. Under somewhat stronger assumptions, the nominal interest rate may also decline.

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Year of publication:	1998
Authors:	Espinosa, Marco ; Russell, Steven
Published in:	Canadian Journal of Economics. - Canadian Economics Association - CEA. - Vol. 31.1998, 1, p. 92-103
Publisher:	Canadian Economics Association - CEA

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Extent:	text/html
Type of publication:	Article
Notes:	Published
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005271742